Alibaba and Suning Commerce Enter Into Strategic Alliance

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HANGZHOU, China--(BUSINESS WIRE)--Alibaba Group Holding Limited (NYSE:BABA) (“Alibaba”) and Suning
Commerce Group Limited (SSE:002024) (“Suning”) today announced that
Alibaba will invest approximately RMB28.3 billion (US$4.63 billion) for
a 19.99% stake in Suning, one of the largest consumer electronics retail
chains in China. After the closing of the investment in Suning, Alibaba
will be the second-largest shareholder in the company.

Concurrent with Alibaba’s investment in Suning, Suning will invest up to
RMB14 billion (US$2.28 billion) to subscribe for up to 27.8 million
newly issued ordinary shares of Alibaba. After the investment, Suning
will hold approximately a 1.1% interest in Alibaba’s enlarged issued and
outstanding share capital.

The strategic collaboration between Alibaba and Suning marks a milestone
that signals the further integration of digital and offline retail. This
strategic collaboration will bring benefits to hundreds of millions of
Chinese consumers who use Alibaba’s online platforms and Suning’s
offline channels. By cooperating, Alibaba and Suning will be able to
provide holistic and more convenient shopping experiences, as well as
superior customer service to users looking to purchase online and
through mobile devices.

As part of the transaction, Alibaba and Suning have entered into a
strategic collaboration agreement to build on synergies in e-commerce,
logistics and incremental business through joint omni-channel
initiatives. Under the collaboration, Suning will open a flagship store
on Alibaba’s Tmall.com platform, focusing on consumer electronics, home
appliances and baby products. The store will offer high-quality product
offerings at attractive prices and an unparalleled superior shopping
experience. Suning’s flagship store will be a major win for Tmall.com,
and reflects Tmall’s status as the premiere platform for brands and
retailers who wish to establish their online presence and direct
engagement with customers.

In the area of logistics, Suning will become a partner of Cainiao,
Alibaba’s logistics affiliate and Suning’s logistics services cover
almost all of the 2,800 counties and districts in China. Suning boasts a
nationwide logistics network covering over 90% of China’s counties
including eight national distribution centers, 57 regional distribution
centers, 353 city forwarding centers and over 1,700 last-mile delivery
stations. With Cainiao’s intelligent delivery solutions and Suning’s
well-developed distribution network, customers can expect to receive
their orders in as fast as two hours in the near future.

This collaboration highlights how Alibaba Group’s unrivaled leadership
in mobile commerce and payments makes it possible for offline retailers
to have an aggressive and successful omni-channel strategy. This
collaboration brings together a strong bricks-and-mortar operation with
an extensive online customer base and resources. Capitalizing on
Suning’s extensive network of offline stores and leveraging Alibaba’s
edge in data technology, both parties can explore online-to-offline and
offline-to-online commerce opportunities that better serve customer
needs and preferences. The collaboration will provide many tangible
benefits to consumers. For example, consumers will be able to have a
physical experience with the product in store, while at the same time
being able to operate other areas – such as ordering and payment –
through their own mobile device. Not only will customers be able to
enjoy the tremendous amount of offerings and pay directly via the Alipay
Wallet on their mobile device, they will also be able to experience the
products and after-sale services in person in Suning’s over 1,600
physical retail stores in 289 cities across China. In addition, Suning’s
retail stores, as well as its over 3,000 after-sales service locations
and over 5,000 affiliate servicing partners in 320 cities across China
will also be able to perform important after-sale maintenance or repair
services to Tmall consumers.

Jack Ma, Executive Chairman of Alibaba Group, said, “Over the past two
decades, e-commerce has become an inextricable part of the lives of
Chinese consumers, and this new alliance brings forth a new commerce
model that fully integrates online and offline.” Ma added, “This
alliance will benefit consumers and merchants by cultivating an open and
transparent integrated ecosystem that will be the backbone of the future
economy.”

Daniel Zhang, CEO of Alibaba Group, said, “We are seeing the integration
of e-commerce with traditional commerce where consumers are able to
enjoy a more engaged, omni-channel and seamless shopping experience.
Customers will be able to enjoy the vast online offerings while having
convenient access to physical stores. By maximizing Suning’s
bricks-and-mortar assets with Alibaba’s vibrant ecosystem, we are in the
best position to provide the ultimate shopping experience for all our
customers.”

Zhang Jindong, Suning’s Chairman, said: “The collaboration between
Alibaba and Suning is a milestone in China’s retail industry and its
influence on e-commerce and offline retailing will be enormous. This
collaboration signals a new trend in the Internet age: Strengthening
China’s traditional industries by leveraging the power of Internet. It
will also help transform China’s manufacturing industry and broaden the
global horizons of Chinese brands.”

Sun Weimin, Suning’s Vice Chairman, said, “We believe the strengths of
Alibaba and Suning complement each other. By exploring standards and
models in the O2O sector, we hope to bring real benefits to Chinese
consumers.”

Consummation of Alibaba’s investment in Suning and the investment by
Suning in Alibaba are subject to customary closing conditions, including
regulatory approvals and, in the case of the investment by Alibaba in
Suning, the approval of the shareholders of Suning.

About Alibaba Group

Alibaba Group's mission is to make it easy to do business anywhere. The
company is the largest online and mobile commerce company in the world
in terms of gross merchandise volume. Founded in 1999, the company
provides the fundamental technology infrastructure and marketing reach
to help businesses leverage the power of the Internet to establish an
online presence and conduct commerce with hundreds of millions of
consumers and other businesses.

1688.com (www.1688.com),
a leading online wholesale marketplace in China

Aliyun (www.aliyun.com),
a provider of cloud computing services to businesses and entrepreneurs

About Suning Commerce Group

Suning Commerce Group (“Suning”, Shenzhen Stock Exchange stock code:
002024), headquartered in Nanjing of China, is one of the largest
consumer electronic retail chains in China. Established in 1990, Suning
is primarily in the retail business of home appliances, consumer
electronics, supermarket categories, baby products, books and virtual
products. Suning was listed on the Shenzhen Stock Exchange in July 2004.

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